Accounting is a major industry, and within that group is a special class of professionals: certified public accountants. A certified public accountant, or CPA, is an accountant who has completed additional educational, examination and education requirements to earn a CPA designation.
Where Do CPAs Work?
CPA careers can be found across a spectrum of industries from public accounting to health care. Other industries where CPAs work include banking, financial markets, management services and tax services. Certified public accountant careers may also involve a variety of positions, depending on the industry or organization, such as:
- Forensic Accountant
- Budget Analyst
- Controller
- Tax Director
- Director of Finance
- Treasurer
- Chief Financial Officer
CPA Responsibilities
Those who pursue certified public accountant careers may be charged with handling a diverse set of tasks, such as:
- Financial reporting — A large percentage of CPA responsibilities fall under this umbrella. According to Jerry Love, a CPA/PFS based in Abilene, Texas, "CPAs do a variety of services to assist clients to prepare financial statements. Some assist with bookkeeping, others assist by looking over the statements prepared by a compiled service."
- Reviews and audits — A CPA or team of CPAs may be called upon to review or audit reported information. Review is a less extensive examination process and offers only a moderate level of assurance, but it can be just right for companies with relatively simple finances. Audits, which are much more methodical and extensive inspections of financial statements, can offer the highest level of assurance.
- Preparing tax returns — Although non-certified PAs may perform this task, the deeper knowledge and more extensive expertise gained through CPA training can give clients an extra measure of confidence that their return is being prepared in the best possible way. Love says, "CPAs who prepare tax returns spend many hours reviewing tax laws to stay current with changes and help clients pay the appropriate amount of taxes."
- Ensuring regulatory compliance — Multinational banks and other large companies sometimes have whole departments dedicated to maintaining compliance with federal, state, and local governmental regulation guidelines, including wage and hour laws and IRS rules and regulations. CPAs may constitute or lead these teams, or, in smaller firms, may undertake the bulk of compliance duties as individuals.
- Creating and overseeing budgets — CPAs in certain organizations assist management with creating budgets, either in a developmental or analytical capacity. A well-trained CPA can help when budgeting is complex or requires taxation expertise.
- Compensation and benefits consulting — CPAs who work in business advisory firms might review a company's existing labor and benefits packages or design new ones from scratch. Contracted CPAs might also analyze executive wage and benefit data to ensure that a company's compensation structure is sorted into as fair a distribution as possible.
- General financial administration — "A CPA may be engaged to be the client's entire back office," says Love, "to open mail, prepare payroll, pay vendors, make deposits and basically be the entire accounting function." CPAs may also be contracted to ensure that a company's back-office administration services have been performed completely and accurately.
How to Become a CPA
The American Institute for Certified Public Accountants (AICPA) refers the steps to become a CPA as "Education, Examination and Experience." Here's a bit more detail about the typical path for CPA careers.
1. Complete Education Requirements
The basic educational requirement for CPAs is a bachelor's degree in accounting. However, specific requirements vary by state and students are encouraged to review their state's educational rules.
2. Pass the Uniform CPA Examination
Those who seek CPA careers must qualify for and successfully pass the Uniform CPA Examination that is sponsored by the AICPA. The examination covers four major topic areas:
- Auditing and Attestation
- Business Environment and Concepts
- Financial Accounting and Reporting
- Regulation
3. Gain Experience
Candidates seeking a CPA designation in order to start their certified public accountant careers must meet their state's experience requirements prior to receiving a license to practice. The AICPA notes that many states require prospective CPAs to work at least one to two years under the supervision of a licensed CPA. Regulations may vary at the state level depending on educational degree, specific employer, and type of work (for instance, auditor vs. tax professional).
4. Meet CPA Licensing Requirements
Upon completion of your state's experience requirements, prospective CPAs can apply for a CPA license, which grants them the right to practice public accounting. Contact your state board of accountancy to see if additional tests are required (e.g., ethics exams) to qualify for licensure.
5. Plan for Continuing Professional Education
Those working in CPA careers are required to take part in continuing professional education (CPE) in order to maintain licensure. State requirements may vary, so check with your state's board of accountancy to understand your location's rules and regulations.
CPA Boards and State Societies
Prospective students looking to start CPA careers should become familiar with not only the AICPA, but their state accounting societies and state boards of accounting.
- State societies are membership-based organizations designed to assist its members in understanding state requirements, providing continuing education programs and more.
- State boards of accountancy are the rule-setting organizations, creating and maintaining educational requirements and handling CPA eligibility regulations. These boards are also responsible for CPA licensing and subsequent licensing renewals.
Career Outlook and Salary for CPAs
Among the broader category of accounting careers, the CPA salary and job prospects are potentially better due to the additional training and education involved. As with any occupation, a certified public accountant salary is likely to vary based on industry, experience, location and position. The table below shows the most recent national data from the Bureau of Labor Statistics for the general accounting field.
| Career | Total Employment | Annual Mean Wage |
|---|---|---|
| Accountants and Auditors | 1,280,700 | $79,520 |
Although the BLS doesn't report CPA salary data, Robert Half's 2020 report, "Salary Guide for Accounting and Finance," does highlight occupations that may require CPA training. Here's a sample list of potential CPA careers with their projected 2020 salary ranges:
Corporate Accounting
- Vice President of Finance: $110,000 to $402,250
- Director of Accounting: $97,000 to $226,000
- Controller: $94,250 to $211,000
Public Accounting
- Manager of Tax Services: $88,000 to $167,000
- Audit Manager: $75,750 to $144,500
Financial Services
- Controller: $108,500 to $205,500
- Financial Planning Manager: $87,750 to $165,750
- Internal Auditing Manager: $91,250 to $174,000